Celsius Sues Prime Trust Over $17M in Crypto

Troubled crypto lender Celsius filed a lawsuit against Prime Trust on 23 August, claiming the crypto custodian had failed to return more than $17 million worth of cryptocurrency.

According to documents filed with the U.S. Bankruptcy Court, Celsius claims that Prime Trust is yet to return over $17 million in crypto assets, which remained on its custody platform after the two companies terminated their relationship in June 2021. The complaint clarified that Prime Trust acted as a crypto custodian for Celsius’ New York and Washington-based customers, and that while it did return $119 million in crypto after the break up, it still held some tokens. The complain reads:

“In June 2021, Prime Trust purported to terminate its relationship with Celsius and indicated its desire to return the crypto assets it was holding to Celsius. Prime Trust complied in part, transferring crypto assets worth approximately $119 million (at recent prices) to Celsius. But Prime Trust has failed and refused to transfer to Celsius approximately $17 million worth of crypto assets (at recent prices) that Celsius instructed Prime Trust to deliver.”

Celsius has claimed that the crypto custodian still owes it 398 Bitcoin (BTC), 3,740 Ether (ETH), 2,261,448 USDC, and 196,268 Celsius (CEL), which at current prices are worth $17.1 million. Celsius’ legal team noted that Prime Trust should have delivered “all property belonging to Celsius” when the company filed for bankruptcy, and requested that it is ordered to do so under “section 542 of the Bankruptcy Code”.

The troubles for Celsius users began on 13 June, when the company paused all withdrawals on the platform citing “extreme market conditions”. A month later — after repaying its debts to decentralized finance (DeFi) platforms Compound, Aave, and Maker — Celsius filed for Chapter 11 bankruptcy protection, with recent documents suggesting its debt is close to $2.8 billion.